What happened to my PSE8 edited pictures

I imported some fresh pictures today and did some tweaking in Photoshop Elements 8 having set that app as my editing program. Now this evening I went back to look at those pictures and all the ones I edited and saved have a large triangle against a black background containing an exclamation mark in them when I double click to see them in enlarged view. I also cannot edit these at all anymore. What happened??? My earlier picture that I edited open just fine...something happened with these however.

iPhoto 11 does not work with external editors like the previous versions did and is a big step backward or a bug.
When you go to edit in an external editor iPhoto immediately creates a duplicate file and that's what gets edited by PSE. When the edit is saved it's saved to the new file and is not associated with the original file like iPhoto edits are.
Now if you try to view the edited file or use it in a slideshow or book you can see the larger version of it. However, if you quit and relaunch iPhoto and try to use that edited photos iPhoto acts as if the modified version is missing (and it is because the original of that duplication is the modified version). If you do a Revert to Original iPhoto will start using the original of that photos which is the modified version. I know it's a bit convoluted and hope you can follow me.
Be sure to report this bug to Apple via http://www.apple.com/feedback/iphoto.html. The more reports from users the better the chance Apple will address it in the next update.
This may be preaching to the choir but here's some info on using PSE from within iPhoto. The directions are for PSE 9 so may be a bit different from PSE 8 but the general info should be good:
Using Photoshop (or Photoshop Elements) as Your Editor of Choice in iPhoto.
1 - select Photoshop as your editor of choice in iPhoto's Advanced Preference Section's under the "Edit photo:" menu.
Click to view full size
2 - double click on the thumbnail in iPhoto to open it in Photoshop. When you're finished editing click on the Save button. If you immediately get the JPEG Options window make your selection (Baseline standard seems to be the most compatible jpeg format) and click on the OK button. Your done.
3 - however, if you get the navigation window
Click to view full size
that indicates that PS wants to save it as a PS formatted file. You'll need to either select JPEG from the menu and save (top image) or click on the desktop in the Navigation window (bottom image) and save it to the desktop for importing as a new photo.
This method will let iPhoto know that the photo has been editied and will update the thumbnail file to reflect the edit..
NOTE: With Photoshop Elements 9 the Saving File preferences should be configured as shown:
Click to view full sizes
I also suggest the Maximize PSD File Compatabilty be set to Always.
In PSE’s General preference pane set the Color Picker to Apple as shown:
Click to view full size
NOTE: If you want to use both iPhoto's editing mode and PS/PSE without having to go back and forth to the Preference pane, once you've selected PS as your editor of choice, reset the Preferences back to "Open in iPhoto". That will let you either edit in iPhoto using the Edit button or Control-clicking on the thumbnail and selecting "Edit in iPhoto" or in PS/PSE by Control-clicking on the thumbnail and selecting "Edit in External Editor" in the Contextual menu.
Click to view full size
This way you get the best of both worlds.

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